In the financial sector, 2015 was a year of recovery. The market has begun to stabilize and investors are feeling comfortable investing in the U.S. Nowhere is this more true than in the mortgage lending industry. Because of this, there are many positive changes and trends to look forward to in the new year. Among the biggest topics of discussion are government mandated compliance requirements, rising mortgage rates, and the regulations imposed on secondary lenders by the financial companies themselves.
One factor that everyone in the industry is concerned about is TILA-RESPA Integrated Disclosure rule, or TRID, which basically forces lenders to be forthcoming in their lending practices. Intended to protect borrowers, these regulations may have a major effect on how lenders operate, according to National Mortgage News. This is likely going to cause rates to rise, which they are expected to do within the early months of the new year.
Another trend addressed by the National Mortgage News is the potential for lenders to ease up on requirements for Agency loans. With the new government imposed compliance regulations, many financial companies are beginning to rethink their own regulatory policies, which may be having a negative effect on smaller lenders and secondary mortgage lenders. This could have a multifaceted effect, though it is difficult to tell. Many believe that mortgage rates are expected to rise in the next year, which could alter the situation for mortgage sellers. While there is no guarantee, rate hikes are expected, which could ultimately be to the benefit of lenders and borrowers alike.
One of the big themes of 2015 was the desire to comply with the new lending regulations. Not only are lenders obligated to disclose all relevant information to borrowers, they also have to remain transparent to the concerned government entities. One of the biggest challenges for the smaller financial institutions has simply been coming up with the time and expertise necessary to comply with all of these regulations. In many cases, smaller lending firms have had to hire additional attorneys and accountants to oversee these compliance measures. The hopes in 2016 are that automated systems will be able to alleviate some of these concerns. Furthermore, automation may be able to let us know if these compliance requirements are having their intended effect. As with everything else, only time will tell.